Governance of Gozo road works still found wanting by NAO

MGOZ

Three years after a damning audit, the Gozo Ministry is yet to adequately address inefficiency – particularly when it comes to human resources – in the units handling road works, the National Audit Office has found.

The NAO published a compilation of follow-up reports on Thursday, made by its IT section and its performance audit section, which included a follow-up of its 2017 report entitled “Maintaining and Repairing the Arterial and Distributor Road Network in Gozo.”

It had primarily audited the Road Section (RS)and the Construction and Maintenance Unit (CMU) within the ministry’s Directorate for Projects and Development – since renamed the Maintenance and Restoration Directorate. While it found that the ministry was not receiving adequate funding to handle its responsibilities, it also flagged an overall lack of good governance.

The funding has been addressed: the directorate’s financial allocation rose from €1.5 million in 2015 to €10 million this year. The good governance issues, however, were not dealt with as effectively.

Directorate still overstaffed

The NAO had found that the directorate was clearly overstaffed, and strongly recommended an internal exercise to see whether a segment of its workforce could be reassigned. It also found that many workers’ skills were lacking, and thus recommended a “rigorous, carefully planned-out training programme intended at elevating each employee to a competence level that is commensurate to his/her respective grade.”

Additionally, the office urged the directorate to monitor its staff and to take decisive action – disciplinary or otherwise – if any personnel were consistently not measuring up to expected performance.

There has since been a slight reduction in staff numbers and an accompanying decrease in expenditure on wages among the two relevant units. The annual wage bill for the CMU fell from €1.62 million in 2017 to €1.49 million in 2019, while that of the RS fell from just under €640,000 to around €422,000.

While the ministry is planning training programmes, none have yet started.

But while the ministry nevertheless claimed a lack of technical staff in light of an increased frequency of road works, the NAO “still has difficulties understanding how 120 employees engaged jointly between the RS and the CMU are being efficiently deployed to tackle road related works in Gozo.”

Procurement processes still inadequate

Back in 2017, the NAO urged the directorate to ensure that its procurement processes are consistently covered by adequate contractual and performance safeguards, which should be documented to preserve an audit trail. Such safeguards should also be utilised and enforced consistently, the office recommended.

For its review, the NAO reviewed a random sample of five project files selected from works carried out by the ministry in 2018 and 2019. However, pivotal documentation was found missing in all five.

In one case, the NAO was not even forwarded a signed contract, a related performance guarantee which covers the works in question, or an adequate insurance policy. In its reply, the ministry said that the project was awarded through a direct order – clarifying this only happened after a failed tender process – and that therefore, a performance guarantee and insurance policy was not required.

None of the reviewed files featured site inspection report, with the ministry acknowledging that this was not generally done. Four did not feature the implementation of retention money as a performance safeguard mechanism: in this case, the ministry said that it was an administrative error that was being addressed.

In four cases the audit team also failed to find any photographic evidence of completed works, quantity surveyor reports nor quality controls tests. The ministry replied that it would forward this documentation accordingly, but only managed to submit photographic evidence of works-in-progress on one of these four projects.